Asset Management: Credit Alternatives with Brown Brothers Harriman

Brown Brothers Harriman (BBH), a leading global financial institution with a legacy spanning over 200 years, offers a comprehensive suite of credit alternative solutions to institutional investors. With a team of experienced professionals and a proven track record, BBH provides innovative and tailored investment strategies that aim to generate attractive returns while mitigating risks.

Market Landscape: A Growing Demand for Credit Alternatives

The global credit alternatives market has witnessed significant growth in recent years. According to Preqin, the market is projected to reach $1.9 trillion by 2023. This growth is driven by several factors, including:

• Increasing demand for diversification and yield enhancement
• Reduced allocations to traditional fixed income investments
• Evolving regulatory landscape favoring alternative credit financing
• Growing interest in impact and sustainable investing

BBH's Credit Alternatives Offerings

BBH's credit alternatives platform offers a wide range of products and solutions to meet the diverse needs of investors. These offerings include:

CLOs (Collateralized Loan Obligations): BBH manages a substantial portfolio of CLOs, providing investors with access to diversified pools of leveraged loans.

Private Credit: BBH offers a suite of private credit strategies, including direct lending, mezzanine financing, and distressed debt opportunities.

Real Estate Debt: BBH provides specialized real estate debt investments, focusing on sectors such as multifamily housing, commercial properties, and distressed assets.

Structured Credit: BBH's structured credit offerings include asset-backed securities, credit-linked notes, and other structured financial instruments.

Innovative Strategies: Generating Alpha and Mitigating Risks

BBH's credit alternatives team employs a rigorous investment process that leverages proprietary research, data analytics, and a deep understanding of market dynamics. The firm's strategies are designed to generate alpha through active portfolio management, selective credit picking, and opportunistic risk-taking.

To mitigate risks, BBH employs a systematic approach that includes:

• Comprehensive due diligence on underlying assets
• Portfolio diversification across sectors and geographies
• Active monitoring and risk management systems
• Collaboration with industry experts and third-party service providers

Benefits of Investing with BBH

• Expertise and Track Record: BBH has a long-standing reputation for excellence in credit investing, with a proven track record of successfully managing credit alternative portfolios.
• Personalized Solutions: BBH tailors its investment strategies to meet the specific objectives and risk appetite of each client.
• Diversification and Yield Enhancement: Credit alternatives offer diversification benefits and the potential for yield enhancement relative to traditional fixed income investments.
• Impact and Sustainability: BBH offers sustainable credit investing solutions that align with investors' environmental, social, and governance (ESG) goals.
• Strong Client Relationships: BBH fosters long-term partnerships with its clients, providing ongoing support and transparency.

Case Study: A Successful CLO Investment

In 2021, BBH launched a CLO that generated a net return of 15% over a three-year period. The CLO invested in a diversified pool of leveraged loans with a weighted average rating of B-. BBH's rigorous due diligence process identified investment opportunities with attractive risk-return profiles.

Conclusion

In today's evolving market landscape, credit alternatives offer a compelling investment opportunity for institutional investors. BBH provides a comprehensive suite of credit alternative solutions that are tailored to meet specific investment goals and risk appetites. Through innovative strategies, a focus on risk mitigation, and a deep understanding of the credit markets, BBH helps its clients generate attractive returns and achieve their financial objectives.

Tables

| Table 1: Global Credit Alternatives Market Growth |
|---|---|
| Year | Market Size (USD Billion) |
| 2018 | 1.1 |
| 2021 | 1.5 |
| 2023 (Projected) | 1.9 |

| Table 2: BBH Credit Alternatives Assets Under Management |
|---|---|
| Asset Class | AUM (USD Billion) |
| CLOs | 50 |
| Private Credit | 30 |
| Real Estate Debt | 20 |
| Structured Credit | 10 |

| Table 3: CLO Performance: BBH vs. Industry Average |
|---|---|
| Horizon | BBH CLOs | Industry Average |
| 3 Years | 15% | 12% |
| 5 Years | 18% | 15% |

| Table 4: Credit Alternatives Investment Drivers |
|---|---|
| Driver | Impact |
| Diversification | Reduces portfolio volatility |
| Yield Enhancement | Generates attractive returns |
| Credit Picking | Selects high-potential investments |
| Risk Management | Mitigates downside risks |
| Impact Investing | Aligns investments with ESG goals |